SB668: Bill Text

LRB-5025/1

ARG:wlj

2023 - 2024 LEGISLATURE

2023 Senate BILL 668

November 9, 2023 - Introduced by Senators Knodl and Wanggaard, cosponsored by Representatives O'Connor, Murphy and Macco. Referred to Committee on Shared Revenue, Elections and Consumer Protection.

SB668,3,9 An Act to repeal 138.09 (7) (b), (bm) and (bn), 138.09 (7) (e) 2., 138.09 (7) (gm) 1. and 2., 138.12 (14), 218.04 (3) (c), 218.04 (8), 224.72 (7) (bm), 224.725 (5) (a) 1. and 2. and 224.725 (5) (b); to renumber 138.09 (1a) and 218.0161; to renumber and amend 138.09 (1d), 138.09 (1m) (a), 218.0114 (4), 218.0114 (17), 218.04 (1) (b), 218.04 (13), 224.72 (7) (am), 224.725 (5) (a) (intro.), 224.728 (title), 224.728 (1), 224.728 (2), 224.728 (3), 224.728 (4) and 224.728 (5); to amend 49.857 (1) (d) 12., 73.0301 (1) (d) 6., 100.315 (1), 108.227 (1) (e) 6., 138.09 (1m) (b) 1. (intro.), 138.09 (2), 138.09 (3) (c), 138.09 (3) (d), 138.09 (3) (e) 1. a. and f., 138.09 (3) (f), 138.09 (6), 138.09 (7) (c) 2. and 4., 138.09 (7) (e) 3., 138.09 (7) (g) (intro.), 138.09 (7) (k), 138.12 (3) (b), 138.12 (4) (am) 1., 138.12 (5) (b), 138.14 (4) (a) 1. (intro.), 138.14 (6) (a), 138.14 (6) (b) 1. b., 138.14 (7) (d), 138.14 (8) (c), 138.14 (9) (a) 4., 138.14 (14) (c) 1., 138.14 (14) (m), 138.14 (15) (title), 186.113 (22) (title), 214.04 (20), 215.13 (41) (title), 218.0111 (2), 218.0114 (5) (b), 218.0114 (13) (a), 218.0114 (20) (c), 218.0116 (1) (am), 218.0161 (title), 218.0162, 218.02 (2) (a) 1. (intro.), 218.02 (5) (a) and (b), 218.02 (6) (a) (intro.), 218.02 (6) (a) 1., 218.02 (9) (title), 218.02 (9) (a) (intro.), 218.02 (9) (c), 218.04 (1) (a), 218.04 (2) (a) and (b), 218.04 (3) (a) 1. (intro.), 218.04 (3) (b), 218.04 (4) (a), 218.04 (4) (am) 1., 218.04 (5) (a) (intro.), 1., 2., 3. and 4., 218.04 (5) (c), 218.04 (6) (title), 218.04 (6) (b), 218.04 (6) (c) (intro.) and 2., 218.04 (7) (title), 218.04 (7) (a), 218.04 (9g) (c), 218.04 (9m) (e), 218.04 (10) (b), 218.04 (13) (title), 218.05 (3) (a) 2., 218.05 (3) (c), 218.05 (10) (a) and (c), 218.05 (11) (intro.), 218.05 (12) (title), 218.05 (12) (a) 1., 220.02 (2) (c), 220.02 (3), 220.06 (1m), 224.71 (7), 224.71 (13g) (b), 224.71 (18), 224.72 (2) (am), 224.72 (7) (title), 224.725 (1), 224.725 (1r) (a) 5., 224.725 (1r) (c) 1., 224.725 (1r) (c) 2. d., 224.725 (2) (a), 224.725 (2) (c) (intro.) and 2. (intro.), 224.725 (5) (title), 224.74 (1) (a), 224.74 (2) (b), 224.755 (3) (a), (c) and (d), 224.755 (4) (b) 1., 224.77 (1) (a), 224.77 (9), 321.60 (1) (a) 12., 422.202 (3) (c) and 946.79 (1) (a); to repeal and recreate 138.09 (3) (b), 138.12 (3) (c), 138.12 (5) (a) 2., 138.14 (5) (c), chapter 217, 218.02 (5) (c), 218.04 (6) (a), 218.04 (10) (a) and 218.05 (14) (a); and to create 138.09 (1c) (a) 3., 4., 5. and 6., 138.09 (1c) (b), 138.09 (1g) (a), (b), (d), (e), (f), (g), (h) and (i), 138.09 (1m) (b) 2. c., 138.09 (1m) (d) and (e), 138.09 (3) (cm), 138.09 (3) (e) 3., 138.09 (3) (g), 138.09 (4) (a) 4., 138.09 (4) (e), 138.12 (1) (cm) and (dm), 138.12 (3) (d) 2. c., 138.12 (3) (f), (g) and (h), 138.12 (5r), 138.14 (1) (br), (jm) and (m), 138.14 (4) (a) 1g., 1m. and 1r., 138.14 (4) (a) 2. c., 138.14 (15) (c), 218.0101 (24m) and (37m), 218.0114 (4g) and (4m), 218.0114 (17) (b), 218.0114 (21g) (b) 3., 218.0114 (25), 218.0161 (2), 218.02 (1) (e) and (f), 218.02 (2) (a) 2. c., 218.02 (2) (d), (e) and (f), 218.02 (6) (a) 5., 218.02 (9) (d), 218.04 (1) (b) 2. and 3., 218.04 (1) (em) and (h), 218.04 (3) (a) 1g., 1m. and 1r., 218.04 (3) (a) 2. c., 218.04 (4) (ap) and (c), 218.04 (5) (a) 6., 218.04 (9), 218.04 (13) (b), 218.05 (1) (e) and (f), 218.05 (3) (am) 2. c., 218.05 (3) (d), (e) and (f), 218.05 (12) (a) 4., 218.05 (12) (f), 224.35 (1g), 224.35 (1m) (bm), 224.35 (1r), (6), (7) and (8), 224.72 (2) (c) 2. c. and 224.725 (2) (b) 1. c. of the statutes; relating to: the licensing and regulation by the Department of Financial Institutions of consumer lenders, payday lenders, money transmitters, sales finance companies, collection agencies, mortgage bankers and mortgage brokers, adjustment service companies, community currency exchanges, and insurance premium finance companies; the Nationwide Multistate Licensing System and Registry; modifying and repealing rules promulgated by the Department of Financial Institutions; and granting rule-making authority.

Analysis by the Legislative Reference Bureau

This bill makes changes related to the Department of Financial Institutions' regulation of collection agencies, consumer lenders, and sellers of checks and standardizes certain DFI administrative procedures related to these and other licensed financial services providers.

Nationwide Multistate Licensing System and Registry

The bill authorizes DFI to utilize the Nationwide Multistate Licensing System and Registry to administer its licensing functions, and standardizes certain administrative procedures, with respect to the following: consumer lenders; payday lenders; collection agencies; sales finance companies; money transmitters (currently known as sellers of checks); mortgage bankers and mortgage brokers; adjustment service companies; community currency exchanges; and insurance premium finance companies (collectively, licensed financial services providers). The NMLSR is a multistate system developed and operated for the licensing and registration of persons in financial services industries.

Under current law, DFI participates in the NMLSR (formerly known as the Nationwide Mortgage Licensing System and Registry) only with respect to the licensing of mortgage loan originators and certain other functions related to mortgage loan originators, mortgage bankers, and mortgage brokers. Current law allows DFI to establish relationships or contracts with the NMLSR or other entities designated by the NMLSR to collect and maintain records and process transaction or other fees related to mortgage loan originators, mortgage bankers, and mortgage brokers. With respect to licensing mortgage loan originators, DFI may require that an applicant submit any form, fee, or other information directly to the NMLSR and may authorize the NMLSR to perform functions related to the licensing of mortgage loan originators. DFI may also provide to the NMLSR information relating to mortgage loan originator licensing or responsibilities. DFI may also rely on the NMLSR to establish application or reporting deadlines for mortgage loan originators and other requirements related to mortgage loan originators. DFI may also use the NMLSR as an agent for requesting and distributing information, including to other governmental agencies. In general, information that is confidential or privileged when it is provided to the NMLSR remains confidential or privileged.

The bill expands DFI's participation in the NMLSR and requires DFI to utilize the NMLSR with respect to the licensing and regulation of licensed financial services providers, including requiring applicants and licensees to provide information directly to the NMLSR and to comply with application and reporting deadlines established by the NMLSR. These applicants and licensees must register with, and maintain a unique identifier issued by, the NMLSR. The bill provides DFI with authority relating to the NMLSR that is additional to the NMLSR authority described above. DFI may require an applicant or licensee to submit identity information, a credit report, an investigative background report, fingerprints for identity verification or a criminal history check, or other personal or professional history information. DFI may report to the NMLSR enforcement actions against or violations by licensed financial services providers, which generally must be kept confidential.

The bill standardizes the license renewal process and renewal period for licensed financial services providers and specifies that the renewal application and related materials or information must be submitted through the NMLSR or as directed by DFI. The bill specifies reasons for which DFI may deny renewal of a license and allows an expired license to be reinstated within two months after the license expires.

The bill requires licensed financial services providers to keep current and accurate all material information on file with DFI and the NMLSR. If the information changes in any material respect, the licensed financial services provider must notify DFI and the NMLSR of the change within 10 days after the change. The bill also requires most licensed financial services providers to submit annual reports and financial statements through the NMLSR or as directed by DFI.

Collection agencies

The bill makes various changes relating to DFI's licensing and regulation of collection agencies and their employees.

Under current law, a person may not operate as a collection agency unless the person is licensed as a collection agency by DFI. A “collection agency" is defined as a person engaging in the business of collecting or receiving for payment for others of any account, bill, or other indebtedness, but the definition also contains specific exceptions, including those for attorneys, banks, express companies, health care billing companies, insurers, and real estate brokers and salespersons. A collection agency is subject to regulation by DFI and to certain laws regulating its operations.

Also under current law, a “collector" or “solicitor" is defined as a person employed by a collection agency to collect or receive payment, or to solicit the receiving or collecting of payment, for others of any account, bill, or other indebtedness outside of the collection agency office or the person's home. A collector or solicitor must hold a separate license as a collector or solicitor, which must state the name of the collector's or solicitor's employer. The collector or solicitor must carry this license as a means of identification whenever the collector or solicitor is engaged in business.

The bill makes numerous statutory changes related to the licensing and regulation of collection agencies and their employees, including the following:

1. The bill eliminates the requirement that a collector or solicitor hold a license separate from the license of the collection agency that employs the collector or solicitor. The bill also changes the definition of collector or solicitor to any person who, on behalf of a licensed collection agency, does any of the following: 1) collects, or attempts to collect, for others any account, bill, or other indebtedness; 2) receives payment for others of any account, bill, or other indebtedness; or 3) solicits any account, bill, or other indebtedness for collection by the collection agency. In addition, the bill specifies that a collection agency is responsible for, and must supervise the acts of, its collectors and solicitors and any other person who acts on its behalf.

2. The bill changes the definition of a collection agency by adding exceptions for mortgage bankers licensed by DFI and credit unions and by deleting the exception for express companies. Accordingly, under the bill, licensed mortgage bankers and credit unions are not regulated as collection agencies.

3. The bill specifies that a separate collection agency license is required for each place of business maintained by the collection agency from which the collection agency or its collectors or solicitors engage in the business of collecting or receiving payments for others of any account, bill, or other indebtedness of a person located in this state. The bill also specifies that, if an employee of a licensed collection agency works from the employee's residence, a collection agency license is not required for the employee's residence, but the employee's resident address may not be presented to the public as a location or office of the collection agency and collection agency records may not be maintained at the employee's residence.

4. As described above, the bill requires DFI to use the NMLSR in the licensing and regulation of collection agencies. The bill also modifies license renewal and reporting procedures for collection agencies to conform to the standardized procedures applicable to all licensed financial services providers that use the NMLSR. This change includes changing the collection agency licensing year to a calendar year.

5. The bill specifies that the annual license fee applies for each place of business that is required to be separately licensed. The bill also specifies that if an applicant for an initial collection agency license fails to complete the application within 60 days after DFI provides written notice that it is incomplete, the application is considered abandoned, although the applicant may submit a new application.

6. The bill expands the reasons that DFI may suspend or revoke a collection agency license to include the following: the collection agency has violated DFI's rules related to collection agencies; and the collection agency has made a material misstatement, or knowingly omitted a material fact, in an application for a license or in information furnished to DFI or the NMLSR.

7. The bill specifies that a collection agency must deposit and maintain in its trust account money due to a claimant or forwarder within 48 hours after collection, while current law requires the money to be deposited promptly.

8. The bill specifies that a collection agency may forward printed collection notices to a debtor that are unsigned.

9. The bill creates statutory provisions relating to collectors or solicitors that are similar to provisions that currently appear in DFI's rules. A collector or solicitor may use an alias in oral or written communications with a debtor, but the alias must include a first and last name and the collector or solicitor may not have more than one alias. A collector or solicitor may only change an alias for good cause and if DFI is first notified of the change.

10. The bill modifies current law provisions relating to a collection agency's change of business location. The bill requires a collection agency to give written notice to DFI at least 30 days prior to changing its business location, but deletes the requirement that the collection agency obtain approval from DFI.

11. The bill gives DFI discretion to determine whether to report to the district attorney for prosecution violations of law relating to a collection agency.

The bill also modifies and repeals various DFI rules related to collection agencies, including the following:

1. The bill prohibits, with an exception, a licensed collection agency from contracting for or assessing a fee, commission, or other charge to a creditor for returning any account to the creditor that is not in the actual process of collection.

2. The bill requires a licensed collection agency's trust checking account to be identified as a “trust account.” For the purpose of determining that funds are maintained in a trust account sufficient to pay creditors or forwarders, amounts collected by a third party, but not yet deposited into the trust account, are not considered trust funds. Third-party payment processors may not be given authority to withdraw funds from a collection agency's trust account.

3. The bill requires a licensed collection agency, in the records that it must keep at its office, to maintain a list of all collectors and solicitors employed by the collection agency that includes specified information about each collector or solicitor.

4. The bill includes the following requirements related to a licensed collection agency's use of a trade name (commonly referred to as a “doing business as” or “d/b/a” designation): 1) a licensed collection agency may not conduct business under a name other than a name listed on its license; 2) before using a trade name, the collection agency must obtain approval of the use of the trade name from DFI; and 3) the trade name may not include a corporate identifier.

5. The bill specifies that, in attempting to collect an alleged account, bill, or other indebtedness, a licensed collection agency may not violate any federal or state statute, rule, or regulation that relates to practice as a collection agency.

6. The bill defines “terminated,” for purposes related to the termination of a collection agency license, to include a license that is surrendered, revoked, or expired.

7. The bill specifies that a collection agency must enter into a written agreement with the creditor not only before accepting accounts for collection from the creditor but also before earning or collecting a fee or commission.

8. The bill includes restrictions on the ability of a collection agency and its client to modify the meaning of the defined term “actual process of collection” for purposes of a collection agency's duty upon receiving a written request from a creditor or forwarder for the return of an account not in the actual process of collection.

9. The bill changes the date by which a licensed collection agency must provide a remittance statement and remit money due to creditors or forwarders, establishing the deadline as the last day of the month following the close of the month during which the collection was effected instead of 30 days from the close of the month during which the collection was effected.

10. The bill repeals a rule relating to the use of an alias by a collector or solicitor, but incorporates similar provisions into the statutes.

11. The bill makes other changes to DFI's rules to retain consistency with the statutory changes in the bill.

Licensed lenders

The bill makes various changes relating to DFI's licensing and regulation of certain consumer lenders.

Under current law, a lender other than a bank, savings bank, savings and loan association, credit union, or any of its affiliates (financial institution) generally must obtain a license from DFI to assess a finance charge for a consumer loan that is greater than 18 percent per year. This type of lender is generally referred to as a “licensed lender." A “consumer loan” is not defined in provisions governing licensed lenders, but the Wisconsin Consumer Act (WCA) defines a consumer loan as a loan made to an individual for personal, family, or household purposes that is payable in installments or for which a finance charge may be imposed and includes most transactions under an open-end credit plan such as most credit card debt.

The bill makes numerous changes related to the licensing and regulation of licensed lenders, including the following:

1. The bill creates a definition of consumer loan for purposes of licensed lenders that is similar to the WCA definition of consumer loan.

2. The bill specifies that provisions governing licensed lenders apply to any person who takes an assignment for sale, in whole or in part, of a consumer loan with a finance charge in excess of 18 percent per year, without regard to whether the loan was originally made by a financial institution. The bill also specifies that provisions governing licensed lenders do not apply to collection agencies, payment processors, and certain persons involved in investment or financing transactions.

3. The bill specifies that the following activities are doing business that require a person to be licensed as a licensed lender: a) making a consumer loan that has a finance charge in excess of 18 percent per year; b) taking an assignment of a consumer loan in which a customer is assessed a finance charge in excess of 18 percent per year; or c) directly collecting payments from or enforcing rights against a customer relating to a consumer loan in which a customer is assessed a finance charge in excess of 18 percent per year.

4. The bill specifies that a licensed lender may contract with a person that is not a licensed lender to service a consumer loan on behalf of the licensed lender, but the licensed lender generally is responsible for violations of law committed by the contracted party with respect to the servicing of the consumer loan. “Service” is defined to include collecting or receiving payments of principal, interest, and other amounts on consumer loans and undertaking other tasks related to the administration of consumer loans under the direction and control of the licensed lender.

5. As described above, the bill requires DFI to use the NMLSR in the licensing and regulation of licensed lenders. The bill also modifies license renewal and reporting procedures for licensed lenders to conform to the standardized procedures applicable to all licensed financial services providers that use the NMLSR.

6. The bill provides as an additional basis for DFI to suspend or revoke a license that the licensed lender has made a material misstatement, or knowingly omitted a material fact, in an application for a license or in information furnished to DFI or the NMLSR.

7. The bill eliminates provisions related to consumer loan interest rates that apply to certain loans entered into before specified dates, the latest being August 1, 1987.

8. The bill removes a provision of current law that, subject to exceptions, all loans must be consummated at the licensed location, but does not change the requirement that a licensed lender operate only from its licensed location.

9. The bill requires a licensed lender to keep its loan records separate and distinct from the records of any other business of the licensed lender. The bill also requires a licensed lender, upon DFI's request, to promptly deliver books and records located outside Wisconsin to a location within Wisconsin specified by DFI.

Sellers of checks and money transmitters

The bill repeals provisions of current law governing the licensing and regulation of sellers of checks, which are persons engaged in the business of selling and issuing checks, transmitting money, or receiving money for transmission. The bill replaces these provisions with provisions governing the licensing and regulation of money transmitters, titled the Model Money Transmission Modernization Law.

The bill generally requires that a person be licensed by DFI in order to engage in the business of money transmission or advertise, solicit, or hold itself out as providing money transmission (money transmitter). However, certain persons and transactions are exempt from this license requirement, including federally insured financial institutions, government agencies, registered securities broker-dealers, agents of a payee that collect and process payments on behalf of the payee if certain conditions are satisfied, electronic funds transfers of governmental benefits by government contractors, employees and authorized delegates of licensed money transmitters if certain conditions are satisfied, and any other person exempted by DFI, as long as the exempt person does not engage in money transmission outside the scope of the exemption. “Money transmission” means 1) selling or issuing payment instruments to a person located in this state; 2) selling or issuing stored value to a person located in this state; or 3) receiving money for transmission from a person located in this state. “Money transmission” includes payroll processing services. A “payment instrument” is, with specified exceptions such as stored value, a written or electronic check, money order, traveler's check, or other written or electronic instrument for the transmission or payment of money or monetary value, whether or not negotiable. “Stored value” means monetary value representing a claim against the issuer that is evidenced by an electronic or digital record and is intended and accepted for use as a means of redemption for money or monetary value or payment for goods or services.

Under the bill, an application for a money transmitter license must be made to DFI through the NMLSR. The application must include specified information and be accompanied by an application fee. DFI must promptly notify an applicant when its application is complete and must then investigate the applicant's financial condition and responsibility, financial and business experience, character, and general fitness. DFI must issue a money transmitter license to the applicant, valid for a calendar year, if the applicant satisfies certain requirements, including requirements related to the applicant's financial security and that the applicant's financial condition and responsibility, financial and business experience, competence, character, and general fitness, and the competence, experience, character, and general fitness of persons in control of the applicant, indicate that it is in the interest of the public to permit the applicant to engage in money transmission. DFI must approve or deny an application within 120 days after the date the application is complete, unless DFI for good cause extends the review period. DFI may deny a license application for the same reasons it may suspend a license (discussed below). If DFI denies an application, DFI must provide specific reasons for the denial in a written notice. An issued license may be renewed annually, upon payment of the applicable renewal fee, in accordance with the standardized renewal procedures under the bill for all licensed financial services providers.

The bill allows DFI, after complaint, notice, and hearing, to suspend, revoke, or refuse renewal of a license for specified reasons, including that the licensee no longer meets a requirement for initial granting of the license; the licensee made a material misstatement, or knowingly omitted a material fact, in the application for the license or in information furnished to DFI or the NMLSR; the licensee has engaged in unsafe or unsound practices in connection with, or fraudulent or deceptive conduct or gross negligence relating to, the business of money transmission; or the licensee has violated a law or DFI order applicable to money transmission.

Under the bill, a person or group seeking to acquire control of a licensed money transmitter must apply to DFI, in cooperation with the licensed money transmitter, and obtain DFI's written approval before acquiring control. “Control” means, among other powers, the power to vote at least 25 percent of the outstanding shares of the licensed money transmitter, to elect a majority of its officers, or to exercise controlling influence over its management or policies. The process and criteria for DFI's approval to acquire control of a licensed money transmitter are mostly similar to that for issuance of a money transmitter license. The bill specifies various circumstances under which DFI's approval is not required, although notice may be required to DFI after the acquisition of control. A licensed money transmitter, upon adding or replacing a key individual, must also provide notice of the change to DFI along with certain information. A “key individual” is an individual ultimately responsible for establishing or directing policies and procedures of the licensed money transmitter, such as an officer. DFI may issue a notice of disapproval of a key individual if DFI finds that the competence, experience, character, or integrity of the individual indicates that it is not in the interest of the public or the customers of the licensed money transmitter to permit the individual to be a key individual of the licensed money transmitter.

The bill allows a licensed money transmitter to conduct business through an authorized delegate. An “authorized delegate” is defined as a person designated by a licensed money transmitter to engage in money transmission on behalf of the licensed money transmitter. An authorized delegate of a licensed money transmitter is not required to hold a money transmitter license if the delegate acts within the scope of authority conferred by a written contract with the licensed money transmitter. Before a licensed money transmitter may conduct business through an authorized delegate or allow a person to act as an authorized delegate, the licensed money transmitter must 1) adopt written policies and procedures reasonably designed to ensure that its authorized delegate complies with applicable state and federal law; 2) conduct a reasonable risk-based background investigation sufficient for the licensed money transmitter to determine whether the authorized delegate will likely comply with applicable state and federal law; and 3) enter into a written agreement with the authorized delegate containing specified terms, including appointing the authorized delegate with the authority to conduct money transmission on behalf of the licensed money transmitter; requiring the authorized delegate to fully comply with applicable law pertaining to money transmission; and establishing certain requirements pertaining to the relationship between the licensed money transmitter and the authorized delegate and the duties of the authorized delegate. An application for a money transmitter license must include a list of the applicant's proposed authorized delegates and a sample contract for these authorized delegates. An authorized delegate of a licensed money transmitter holds in trust for the benefit of the licensed money transmitter all money net of fees received from money transmission. An authorized delegate may not use a subdelegate to conduct money transmission on behalf of a licensed money transmitter. DFI may suspend or revoke the designation of an authorized delegate under specified circumstances.

The bill imposes various other requirements on licensed money transmitters, including requiring a licensed money transmitter to 1) forward all money received for transmission in accordance with the terms of the agreement between the licensed money transmitter and the sender, subject to limited exceptions; 2) refund to the sender any money received for transmission within 10 days of receipt of the sender's written request for a refund unless the money was forwarded within 10 days of the date on which the money was received for transmission or unless various other circumstances apply; 3) provide the sender a receipt, for money received for transmission, containing specified information, subject to certain exceptions; 4) submit a quarterly report of condition; 5) submit annually audited financial information that contains specified information and meet certain standards; 6) submit a quarterly report of authorized delegates; 7) report certain events to DFI, including the filing of a bankruptcy petition, a proceeding to suspend or revoke its license in another state, or that the licensed money transmitter, a key individual, or an authorized delegate has been charged with or convicted of a felony; 8) maintain specified records for at least three years and make these records available to DFI upon written request; 9) maintain a tangible net worth of more than $100,000 or an amount determined by formula, whichever is greater, although DFI may exempt a licensed money transmitter from this requirement; 10) maintain a surety bond or other form of security acceptable to DFI in a minimum amount of $100,000 or an amount determined by formula, whichever is greater; and 11) maintain a certain minimum value of permissible investments, specified by investment category, which, if certain events occur such as the filing of a petition for bankruptcy, are held in trust for the benefit of those whose money is outstanding.

The bill provides DFI with various powers relating to the regulation of money transmitters, including investigatory and enforcement powers. Among these powers, DFI may investigate the business of a licensed money transmitter and examine its books, accounts, or records and those of its authorized delegates, and the cost of the examination must be paid by the licensed money transmitter. DFI may issue subpoenas and take testimony. DFI may also accept an audit report made by a third-party for a licensed money transmitter and incorporate the audit report in any report of examination or investigation. DFI may also take possession of an insolvent licensed money transmitter under specified circumstances.